A Texas congressman yesterday asked the Supreme Court to overturn a string of federal railroad rate decisions which he said have artificially increased coal prices and utility bills, particularly in the Southwest.
Rep. Bob Eckhardt (D-Tex.) said the rate and price increases, which will run into billions of dollars over the next several years, are the result of Interstate Commerce Commission failure to implement a 1976 act of Congress. i
"The ICC's error imposes a multibillion-dollar burden on Southwest industrial and residential coal customers and threatens national anti-inflation and energy goals," Eckhardt said in joining in a case brought by Houston Lighting and Powder Co. and Arizona Electric Power Cooperative.
The utilities are attacking a November 1977 ICC decision which approved a rate increase request by Burlington Northern Inc.
According to Eckhardt and the utility companies, that ICC decision, which later became the basis for further rate increase requests by Burlington Northern and others, considered only the railroad's "revenue needs," the traditional ICC standard in rate cases.
But under the Railroad Revitalization and Reform Act of 1976, the ICC must also consider a railroad's profitability and general public need, both of which would have militated in favor of smaller rate increases.
As a result of the disputed decisions, coal hauling rates have more than doubled in the Southwest over 1974 projections. Houston consumers, whom Eckhardt represents, have paid an additional $40 million a year in higher utility bills as a result, he said. $"Coal traffic," Eckhardt also argued in his brief, "has been singled out to bear a disproportionate share of railroad financing efforts.
"In these cases, the commission has required coal shippers to subsidize noncoal traffic without requiring a finding that alternative means for increasing revenues or decreasing costs are forcelosed."
The ICC has used the 1976 law to allow coal rates to subsidize rates other shippers pay to ensure that railroads do not lose the noncoal business to trucks or barges. On the other hand, coal, because of its bulk, can be hauled only by rail.
Further, these rate increases, Eckhardt argued, have discouraged utilities from converting gas and oil-fired boilers to coal.
"Coal offers one of the most important alternatives available to rescue this nation from the economic devastation of OPEC-triggered energy price inflation," he said. "And the recent ban on Iranian oil imports heightens the need for effective implementation of coal conversions and conservations measures.
"Therefore, it is essential to prevent the railroads from exploiting their monopoly positions and expropriating the intrinsic economic advantage of abundant coal supplies."
The U.S. Court of Appeals for the District in June upheld the ICC decisions, after the two utility companies filed an appeal.